Cyprus Officially Passes Capital Controls Into Law

While it is unknown if the Cypriot parliament will agree to, and enact into law, the Troika-demanded deposit haircuts, after the shocking vote of mutiny against Merkel earlier this week that saw not one politician vote for the Europe suggested deposit tax levy (and even the ruling party abstained), a vote which will once more take place tomorrow, moments ago Cyprus became the first Eurozone country to officially implement governmental capital controls into legislation. At this point it had no choice: whatever happens with the deposit haircut, or with everything else, it is now inevitable that the local Cypriots will do all they can to pull as much money from domestic banking system as possible following the complete loss of faith and trust in banks, which is why the government had no choice but to intervene with its own "controls." Sadly, this marks a milestone in the development of the Eurozone - it's all downhill, and accelerating, from here.

There are various other proposals which are currently being voted on, all of which are secondary to the Capital Controls one (the restructuring of the broke banks is perhaps the next most important one), until tomorrow's vote on deposit haircuts.

A photo from today's historic session in Cypriot parliament, in which the first every capital controls in Eurozone history were voluntarily legislated can be seen below.

I think a FIXED levy of 5% or more on ALL deposits is reasonable. This would generate a significant amount of revenue which can be used to stabilize the banking system. We just need to agree on a reasonable levy.

This is only one of many measures. Everyone needs to make sacrifices. If you have a bank deposit, you need to pay a levy; if you have gold, you need to give some of this up. There are no easy options. This is the hard reality, and we need to face up to it.

Firstly, those pensions are written into legislation, so don't even think of getting your dirty hands near them. Secondly, public sector workers are some of the hardest working average Americans. CEOs get to earn millions, and yet you're saying that a fireman who risks his life for 30 years from the age of 20 can't earn a mere 100k pension?

I guess I just have a hard time figuring out why we (the little people) would ever need to make sacrifices in the first place.

I had nothing to do with the creation of the federal "reserve" or the fact that they loan the fiat currency they "print" to our government at interest or the fact that the government spends most of that money on things that I neither agree with nor had the chance to directly vote on.

Scarlett, you have good taste! See my avatar. A younger Scarlett, but a very beautiful one.

Cyprus had no choice. The bank run would have been epic. This serves notice to all European bank depositors. At anytime, the EU can take your money and give it too the banks. For your own good that is to say!

If I had money in my local Cyprus bank and they took a cut and then also said I could only withdraw a few hundred Euros because the Germans said so? "There would be blood"!!!

true enough. but since then the russians have earned/stolen much much more via russian natural resources/arms sales, etc. the talk is now of a thirty percent haircut for uninsured depositors in cyprus. imo the owners of those funds, at least some of them, will not suffer this without, at some point, some revenge.

"He lets the last Hungarian go. He waits until his wife and kids are in the ground and then he goes after the rest of the mob. He kills their kids, he kills their wives, he kills their parents and their parents' friends. He burns down the houses they live in and the stores they work in, he kills people that owe them money. And like that he was gone. Underground. Nobody has ever seen him since."

the raid on lagarde's house, indeed the entire fiasco in cyprus, may be giving ben second thoughts, possibly about his continuing tenure (desire to continue his tenure) and certainly about the efficacy of qe going forward. trust is funny. like a building (say, 7), it takes a long time to build but can be destroyed in seconds.

Those pensions are protected whether you like it or not. UNLESS we want to see decades of legislative progress go down the drain, we NEED to find a way to finance our government. Bank levies on America's $10 trillion in bank deposits are CLEARLY one of the options we need to pursue. That's the reality, so DEAL with it.

So MDB, where is it written that you can confiscate our money that we hold in our accounts? Where is it written that you can take gold away from the people? That same power will allow them to take away those pensions.

Let's put MDB and Dr. Paul Krugman in a room and let them beat eachother to a pulp until until one is unconscious. It would be like that movie...... you know the one..... the one with Ed Norton and Brad Pitt where they start a group where everyone likes to fight eachother and then you find out they're really the same guy at the end. That one. Somebody should start a website like that.

State's can fail. What justifies such a low rate? How am i being compensated for my risk in lending to an entitlement regime either through taxes or some so called 'retirement fund' that is now being legislated to give to "disabled people"? i'm not saying i'm not impressed by zero percent financing of trillion dollar deficits...i'm just saying "where's the economic recovery"? clearly it ain't coming from a "million dollar bonus." i fail to see how we don't end up like we did pre-World War II here where "you have to make something and sell it" then judge the value of the credit (meaning "the Government"...they are the number one creditor in the world right now aren't they?) via "how well the State is managed." North Dakota is an easy mark for getting "hot and heavy" with cuz "the State" has "a State bank." they know how to TRULY leverage money...namely "by understanding you can't legislate growth." simply put "i was hunting up there when you could buy a whole town for $50,000." came with three churches i might add. "just you and Tumbleweed Bob." next thing i know "the rail lines don't look like two pieces of bad spaghetti and 70 year olds are out to go Polka dancing and can't wait to do it." I was like "WTF?" 10 years later "they were pumping 750,000 barrels of oil a day." even the locals were saying "they've been trying that for years...it'll never work." and i was like "what's that?" these were guys and gals who'd never had a job in their life suddenly working on the short line out of Bismark. "and already with the attitude problem." i'm always "long attitude problems" so it seemed a sure thing that "this place is going somewhere...and in a hurry." that was 2002. wish i'd stayed looking back on it...

Government parasites...errr, ahhh, employees as well. At the national level, its a symbiotic relationship...bankers & government...neither can survive without the other now.

Good thing banks are "highly regulated" by government, just imagine what it would be like.

Why, they might have a bank holiday where depositors couldn't get their money or government might institute laws for fees & levies on the innocents just because they happen to have their money in there ;-)

A few hours ago I posted some info I had about Spainish banks getting notice capital controls are imminent. Such enough, it's coming to pass> when you wake up Monday. You ain't seen nuttin yet.

I'm keeping up to date with the situation. I'm hearing word that people in the US of fucking A are already doing early runs to the bank...

Oh yes, you ain't seen nuttin' yet. The global ponzi is collapsing! The good, the bad and the ugly of this situation is that everyone, every man woman and child will suffer. Hard times are fast approaching that made the Great Depression look like Fred Astaire at a rehearsal...

Hey Milliondollarbonus. Please give up all your money first for the sake of the banks and country since you feel so strongly about it. I am sure they will put it to good use and not spend over half a million in one night in London (Biden) or give themselves billions in bonuses for the good work they do with it.

It would seem you are eager to get at money of many extremely hardworking folks. Most of them undereducated and having diligently put a nest egg away. You sure aren't talking to those with substantial assets as they keep most out of the banking system and in investments. So before you start levying on the little guy make sure you know what you are for or against.

Listen you communist cretin. Pensions, government or not, are subject to bankruptcy law. If a government entity goes bankrupt the pensions go kaput. There is a heirarchy on payments in BK favoring pensions, but if there is no money, the pensioners will get zilch. Don't tell me you are going to take my deposits to make the payments because once the BK court takes jurisdiction, it lacks to power to reach out for outside assets other than to approve a loan. You and your ilk have taxed the shit out of us for years and spent like whores on a night off. Payback is coming, not by taxpayers or depositors, but by systemic collapse. It is thee who will blow up the baloon until it explodes.

So you can't touch pensions because they are written into legislation, but you can steal deposits that were supposed to be legislatedly protected with deposit insurance for for deposits <100,000E. I see, it's rules for you, but not for me. Typical banker scum.

Nobody said that fixing our revenue problem was going to be easy. The FDIC can only do so much when our Federal government is struggling to fund itself. We need to make sacrifices, as hard as it may be to admit it. It's the only way to maintain our level of sophisticated government.

It doesn't take much sophistication to just say Charge It! These fucking pussies ran the debt up promising the moon & stars above for votes. They could renounce their salaries, perks & pensions for screwing the pooch as a measure of good faith and then end baseline budgeting if they had the balls to lead by example.

Geez, I always took MDBs comments as satire. I think he really believes his words! Is this what mainstreaming in education has wrought? *****Just realized that I've been fooled by the fake MDB_! I should have been more careful- kinda like those that bank in Europe..

So let me get this straight. Everyone should give a percent of the assets they have because it is only fair? But, pensions shouldn't be cut because that isn't fair? People without pensions have to live off their assets, so you are fine with them getting a cut. However, for you, who clearly has a pension, the same thing is wrong? Even though you didn't contribute but an extremely small percent of the assets likely needed to fund your pension? And your "employer" didn't come close to contributing enough either? Give me a break. You are in for the biggest rude awakening of your entire life. Hopefully sooner than later. You are like those morons who used to make Twinkies. They must be loving their sense of entitlement right about now...

I'm not sure about you, but I believe in democracy. As long as the money is spent by an ELECTED congress, it's going to good use. Sorry, but I think a bank deposit levy is a brilliant idea. It's money just sitting there doing nothing. For goodness' sake - just put to god damn use! The government has a COUNTRY to run and its running out of money!

MDB, are you the one who went through every comment today and hit us all with -1? Because you're sure getting a rise out of a lot of people here with your sarcasm. My hat is off to you - you sound like something out of the Occupy movement last year. You have your Liberal/Socialist/Hippie/Obamasupporter schtick down!

If Cyprus agrees to scalp any account holders, then their banking industry is done. If they bankrupt, then they have a chance to recover. A ZH'er pointed out that Cyprus has more banks per capita then any other country.

I am starting to see along the lines of Lysander Spooner. And I am starting to see why some hesitated about the BOR in the constitution.

"But whether the Constitution really be one thing, or another, this much is certain - that it has either authorized such a government as we have had, or has been powerless to prevent it. In either case, it is unfit to exist."

there are rules to handle these type of tough situatuons. they're called bankruptcy laws. the highest bidder wins the business. The money paid by the buyer then is used to settle the liabilities of the failed bank. there is more than enough capital in the banking system to cover all deposits, what's left goes to the bond holders in order of priority, after that, the equity holders....but in reality, there will not be any left for the equity holders...and the bondholders are likely to take a 30-90% haircut.

that is written into law. but for some reason (we know) the federal aholes in charge don't want the bondholders to suffer any haircut.

Some of you must be new to ZH as your gettin all worked up because MDB's sharp wit and outright dellusion is pissing some of you off. Relax all, some of us already know MDB is the ZH entertainer!! He is always good for laughs all. Most of what he types is sarcastic.

Just laugh and have fun after all we all know what the government gives the government can take away including pensions. Hell even the governmental unions could not stop the 4 day work weeks coming to federal emplyees in some agencies. I prefer to call MDB our delusional sheeple Republican, that will ignore facts just to piss you all off!!

SALUTE MDB I am rolling at your astute delusional observations and some of us missed you. Hell we all need good laughs every now and then! It is not everyday we get someone with MDB's outlook.

Perhaps MDB would get this if his concepts were applied in my field. There is a national shortage of kidneys for transplantation available. If fact many die waiting for one. Nowhere in the surgical consent form is there a guarantee all your organs will be present after a procedure is performed. I checked our hospital's form and it basically says you give permission for the dr to perform procedures medically necessary. Well people need kidneys! Seems pretty medically necesary to me. Hell, people have two why not take one for the greater good? So it's not really stealing if it's a benefit for society as a whole. People will come to realize being left with one kidney is frankly quite generous. Sort of a benevolent form of fascism.
Just call it a kidney levy and everyone will understand and accept it.

How about you pay for it. I never agreed to any of this spending, govt programs or bank bailouts. You and the rest of the leeches can go pound sand along with everyone in government and all the bankers.

I'll consider making a financial sacrifice the day Jamie Dimon and others of his kind that brought the world wide financial system to its knees, are sent to prison. Because if the same shit that got us into this are left in place, nothing will ever change and the populace of the world will continue to be raped by these assholes.

That's good for a hair under $385 thousand dollars. I can honestly say, (with almost a straight face), that I am willing to sacrifice my government's involvement in funding any research into the peckers on waterfowl. "Quack!"

Please tell me in detail how this isn’t the same as bank robbery by anyone at any time. ALSO please explain how this won't turn into a 100% levy on all accounts which will crash the entire banking system.

5% levy from the heads of bankers and politicians that pass theft of deposits; 5% off the face, 5% off the left or right side of the head (to include ear), 5% off the rear, or 5% off the top of their heads - they get to choose. 5% off the bottom of the head would prevent deposit levies but let's not get carried away.